The Benefits Of Taking Out Loans For CollegeCounselors and parents are hesitant for students to take out loans for college. But a new study shows that borrowing money can actually be helpful to students in community college.

Student debt in the U.S. now stands at about $1.5 trillion dollars. We talk of that as a crisis. And it certainly is for graduates who struggle to pay it back. People warn students to avoid borrowing if they possibly can. But this story examines the flip side.

Isn't borrowing sometimes good? Just ask any family that borrowed to get into a house. Some researchers discovered a kind of real-world experiment. It was a chance to find if borrowing leads to a better education for community college students. Elissa Nadworny explains.

ELISSA NADWORNY, BYLINE: One of the ways schools have tried to help students cut down on their debt is to not package federal loans in the financial aid award letters that they send to students. This happens regardless of whether a student is eligible for federal loans. And about half of community colleges do it.

NADWORNY: That's Lesley Turner, an assistant professor of economics at the University of Maryland, talking over Skype. She and her colleague Benjamin Marx at the University of Illinois are studying this. And when students were offered loans in their letters and they took them, they weren't a bad thing. Instead, the small loan really helped students.

TURNER: They attempted more courses. They earned more credit. And they had higher grade point averages.

NADWORNY: The other big outcome...

TURNER: There were also sizable increases in the likelihood of transferring to a four-year public institution, to a bachelor's degree program.

NADWORNY: So why is this all happening?

TURNER: The most likely explanation, we think, is that this loan allowed students to work less, that they would have had to work to pay for their living expenses, to pay for their transportation.

NADWORNY: The loan may have freed up time in their schedules to take more classes, to study, to finish their schoolwork. And remember, these are community college students. So even though tuition is low or even free, there are other expenses.

ODED GURANTZ: The cost of college creates a stress.

NADWORNY: That's Oded Gurantz, an assistant professor at the University of Missouri. He studies higher education.

GURANTZ: And so if the money frees them up so they're not focusing on, you know, where they're going to get their next meal, I actually think it makes a lot of sense that it could help their academic achievement.

NADWORNY: But, Gurantz says, the difference between short-term outcomes, like the researchers found, and long-term outcomes is really important.

GURANTZ: It's not that loans are bad.

NADWORNY: But, he says, there are certain groups of students we should be more concerned about.

GURANTZ: There are students who take out small amounts of loans, don't earn their degree and have a very difficult time paying back those loans.

NADWORNY: It's too soon to know if the students in this research, the ones who took out loans and did better, will fall into this loan trap or be the students who end up getting a degree. Elissa Nadworny, NPR News.

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